No sign of Brexit hit to emerging market asset flows, says IIF

LONDON, June 30 (Reuters) - Early signs show that last
week's vote by Britain to leave the European Union has had no
immediate impact on emerging market asset flows, the Institute
of International Finance (IIF) said on Thursday.

The IIF said daily EM portfolio flows data suggested
outflows were a fairly minor $210 million on "Brexit Friday" and
had seen some recovery since then.

That relatively modest selling compared with $2.7 billion on
August 24 in 2015 when concerns about China's economy and a
devaluation of its currency triggered global financial market
jitters.

Additional data for the whole of June showed that foreign
investors have pumped a net $16.7 billion into emerging market
assets during the month, a big improvement on a near-zero total
in May, although shy of the 2010-2014 average of $22 billion.

It added the buying was concentrated largely at the start of
the month before the June 23 Brexit vote and was quite evenly
distributed across equities and debt, with inflows of $9.3
billion and $7.4 billion respectively.

There was also near-record emerging market debt issuance in
June.

Regionally, EM Asia saw inflows of $13.7 billion, while
Africa and the Middle East had $3.6 billion as South African
equities saw a record amount of buying from foreign investors.

"Early indications suggest that the Brexit vote had limited
immediate impact on portfolio flows to emerging markets," the
IIF said.

"This picture is consistent with an overall muted impact on
EMs to date, despite the spike in risk aversion, helped in part
by anticipation that Fed rate hikes will likely be pushed back
further."
(Reporting by Marc Jones; Editing by Andrew Heavens)